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Resilient Energy Alvington Court Renewables

Share Offer 2017

Risk factors

All investment and commercial activities carry risk, and investors should consider whether REACR is a suitable investment for them in light of their own personal circumstances.

Supporting the community purpose of REACR should be the primary motivation for investment, and investment in the Society should be seen as a long-term social and environmental investment. An investment in REACR is an investment in a trading business and is not a loan or deposit.

It is not possible to set out all the risks that may be involved in an investment in the Shares. You should consider whether the Shares are a suitable investment for you in the light of your own personal circumstances and take advice as necessary. REACR have set out below some of the risks that may be involved – remember there is no guarantee that you will receive any member’s interest on share capital or that your capital (i.e. the money you have invested) will be returned. This list is not necessarily comprehensive and you should read the entire Offer Document to consider any other risks which may impact upon your investment.

Risks associated with your investment

Returns are paid subject to the Directors decisions, which will be based on whether the finanical performance of the wind farm warrants a payment

the shares are withdrawable but are locked for withdrawals for the first couple of years. Withdrawals can then only be made at the Directors’ discretion depending on financial performance.

The Shares are unsecured obligations of REACR

Although REACR are doing, and will do, what they can reasonably do to ensure this does not happen, there is no certainty or guarantee that REACR will be able to repay Shares or that you will receive any return on them (member’s interest on share capital).

This investment is not suitable for those who require a guaranteed income or ready access to capital.

Interest payments are not guaranteed.

Descriptions of possible returns are illustrative only. They are variable and uncertain factors associated with any energy project.

The investment is for a minimum period of three years.

If the Society lacks sufficient cash then it may not be possible to withdraw your Shares.

If the Society is unable to meet its debts and other liabilities, you could lose up to the whole amount held in Shares (but no more than that amount).

Shareholders have no entitlement to receive a share in any surplus of the Society's assets on dissolution following the repayment to members of the nominal value attributable to their Shares because the Society has a statutory asset lock in its Rules.

This investment is not suitable for those who require a guaranteed income or ready access to capital.

As the value of your return can go down and the share capital value of your original investment will not go up.

An investment in Shares is an investment in a trading business (a community enterprise) and you may not get back the amount you invested.

The investment is not a loan or deposit and as such income from your Shares can fluctuate. The Directors have power, where advised by the Society’s accountants, to apportion excess liabilities of the Society amongst the members by reducing the value of Shares. In the event of the insolvency of the Society, risks would be shared among all members of the Society, although as a limited liability entity, member risk is limited to their shareholding.

The Shares are designed to be long term, ethical and social investments and it may not be easy to withdraw them quickly.

Therefore, you should consider what the right amount is for you given your own circumstances. Shares can only be withdrawn in accordance with the Rules and your ability to withdraw can be suspended by the Directors so that you may not be able to withdraw them on short notice or when you wish to do so. There is no withdrawal up to 22nd April 2020. If the Society lacks sufficient cash to enable Shares to be withdrawn, withdrawal may be postponed until cash builds up.

Shares are not transferable so you will not be able to sell them.

You will only be able to withdraw your Shares by application to the Society, for the price you paid for them, or for less. On the death of a member their Shares will form part of the deceased’s estate.

The Shares are not covered by the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS)

This means if the terms of the Shares are not fufulled, there is no right to complain to FOS or to receive compensation from FSCS.

The levels of electricity generation forecast for the installation may not be achieved.

The return on your Shares is variable and is linked to how much electricity is produced and the price it is sold for – therefore, if less electricity is produced (in particular, if there is less wind than predicted) or there are issues with the grid beyond our control, then your return will be lower than expected. Conversely if there are periods with higher winds, there will be a greater surplus.

Insurance may not cover all operational risks and ‘acts of God’ exceptions will apply

Although the Project will be appropriately insured (see page 9), the usual exemptions will apply, as to any insurance policy.

Estimates and Projections

Where we have made estimates or projections of revenues or expenses, these are based on our current beliefs and assumptions – we won’t necessarily update them. These statements may involve known or unknown risks, uncertainties and other important factors which could cause our actual results, performance or achievements to differ from those we expect. In particular, while we believe that any predictions or forecasts we give are reasonable and based on reasonable assumptions supported by objective data, they may be affected by risks and other factors not set out in this Offer Document and therefore are not reliable indicators of future performance.

Project Specific Risks - Wind Turbine Operational Performance

IMPACT: Loss of or reduced electricity production

MITIGANT: The REACR turbine is currently averaging 97.3% technical availability (availability describes the conditions in which the turbine should be operational and how much energy it should be producing). In addition, the terms of the warranty provide that PowerWind will pay compensation of 0.11 Euros per estimated lost kWh of production when the turbine falls below 95% of its target availability during the period of warranty cover, which will be 5 years (unless extended at the Society’s option).

The Society also has access to a full inventory of spares including major items such as yaw and pitch motors which are held 4km from the turbine. This is to reduce potential down time in the event of breakdown.

MITIGANT: We have operational all risks insurance with CNC Asset Ltd, a leading broker of insurance to the wind industry, to protect against a wide range of risks, with cover that is in line with, if not better than, the industry standard. These include Business Interruption Insurance and Loss of Earnings Insurance.

Other Factors to Consider

Equipment purchased by the Society is supported by guarantees from companies believed by the Society to be financially strong. However, equipment suppliers, contractors and purchasers of electricity or other parties contracting with the Society could fail to meet their obligations. REACR will only make large payments to equipment suppliers where these are protected by payment bonds or where we can make payments into escrow accounts.

The target returns stated in the Offer Document are based on financial modelling incorporating best estimates of a range of variable, changeable and uncertain factors, having due regard to historic evidence and the experience gained by the Board including electricity prices, windspeed, operational costs the reliability of the equipment installed and replacement and repair costs.

Descriptions of possible returns are illustrative only. There are variable and uncertain factors associated with any low carbon project.

Prospective members should also read and understand the Rules of REACR.

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